Dal and Oil: India's Kitchen Imports
Why Farmers Choose Rice over Dal
How assured procurement for rice and wheat, but not pulses and oilseeds, tilts farmers' choices, and what reforms could rebalance crops.
Why don’t more Indian farmers grow pulses and oilseeds?
The incentive gap
- Rice and wheat have assured procurement at MSP in many states, especially Punjab and Haryana.
- Pulses and oilseeds have MSPs, but procurement is limited, so farmers often sell below MSP.
- Free power and water make irrigated rice cheaper to grow.
Risk
- Pulses and oilseeds are mostly rain-fed, with higher yield risk.
- Pests and diseases are harder to manage.
- Price volatility is higher.
Consequences
- Overproduction of rice and wheat, with huge FCI stocks.
- Import dependence in oils and pulses.
- Groundwater depletion from rice.
Reform ideas
- Assured procurement of pulses and oilseeds.
- Price deficiency payments: pay farmers the gap between MSP and market price, as tried in MP’s Bhavantar scheme (2017).
- Crop diversification incentives in Punjab and Haryana.
- Better seeds and irrigation for pulses.
The Punjab choice
A Punjab farmer compares crops: rice has assured procurement and free power; pulses have uncertain prices. He sticks with rice.
Thinking farmers ignore national needs
They respond rationally to policies favouring rice and wheat.
Key takeaways
- Assured procurement favours rice and wheat.
- Pulses and oilseeds face higher risk and weak procurement.
- This drives overproduction of cereals and import dependence.
- Procurement and price deficiency payments could rebalance.
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